Count Financial (Count) expects to incur more than $1 million in costs as it repositions itself as the investor director portfolio service (IDPS) operator and responsible superannuation entity (RSE) of its platform suite.
At an investment briefing yesterday, Count chief executive Andrew Gale revealed early estimates of the commercial impact the listed financial services company is likely to face as it begins its Future of Financial Advice (FOFA)-driven restructure.
"There will be some implementation costs as we change and transform the business model. The current estimate is that it will be less than $500,000," Gale said.
He said the company is likely to also be hit with additional ongoing operational costs of between $1 million and $1.5 million per annum due to its application for an additional Australian financial services license for product and service offerings and registration as the company's RSE.
"It's a moderate increase in our expense structure but not hugely onerous. We expect our revenue margins in that change to be resilient," Gale said.
"So in that model obviously where we are the operator [IDPS] and RSE the margins paid by the clients come to Count, we source services by platform providers and we pay a margin through to them."
As part of the move to become its own IDPS, Gale said the company would review its current platform providers though he would not comment further.
Gale said to counteract the restructure costs Count may take advantage of any FOFA related consolidation opportunities.
"One of the impacts of these changes [FOFA] we expect is that it will lead to some consolidation in the market, especially in the small to mid-size licensee sector and as one of the stronger players we would expect to be in a position where we are one of the consolidators along with some other larger organisations in the market," he said.
"If that is the case, we only need roughly an extra $400 million in incremental funds under management to offset the additional costs."
